The introduction of the euro in Hungary was discussed on Monday by the Hungarian Parliament’s Economic Committee. The Governor of the Hungarian National Bank (MNB), Mihály Varga, made it clear that the question of joining the euro could only be put on the agenda once the necessary economic conditions had been created.
In response to a question from MP Tamás Mellár (Párbeszéd – opposition party) about whether the central bank wanted to introduce the euro and when a currency changeover might be possible, Mihály Varga emphasized:
The short-term goal is to ensure that the Hungarian economy and the Hungarian national budget meet the conditions for introducing the euro.”
The MNB governor pointed out that the decision on the euro did not lie solely with the central bank, but required cooperation with the government. However, meeting the convergence criteria was fundamentally beneficial for the Hungarian economy. “Not because we want to pay with the euro immediately, but because it is useful and good for the economy as a whole,” said Varga.
Only when the Maastricht criteria defined by the EU are met can a substantive decision be made on the introduction of the euro. These criteria—which include requirements for price stability, a budget deficit of no more than three percent of GDP, a public debt ratio of less than 60 percent, and participation in the ERM II exchange rate mechanism for at least two years—serve to ensure economic stability in the eurozone.
Despite the central bank’s focus on meeting the criteria, Hungary is currently far from complying with them, Világgazdaság points out. The budget deficit is still above four percent of gross domestic product (GDP), public debt is around 75 percent, and inflation is still outside the central bank’s four percent tolerance range, while it has already reached 2.2 percent in the eurozone.
As a matter of fact, Prime Minister Viktor Orbán has signaled that the introduction of the euro is not a priority for Hungary at the moment.
That is certainly not on my agenda,”
he made clear at the beginning of the month. The Prime Minister justified his position by saying that in less economically developed countries that have introduced the euro (such as Slovakia in 2009), the initial upward momentum slows down after a while and the process of catching up with the developed EU countries stalls.
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Via MTI; Világgazdaság; Featured image: Pixabay
